On how to count waves of different degrees I will show you what to look for when you are trying to analyze current price action. For this purpose this sub chapter will have two recordings with different examples on different currency pairs, giving you some tips and tricks regarding what to look for when looking at a one hour chart. I will show you how to interpret the price structure, if price is making a pattern what kind of a wave we’re looking for (there are patterns more likely to be met on specific waves – for example contracting triangles are to be met on b waves and on four waves, and it is not correct to label a contracting triangle as a second wave), and much more.
Also on this sub chapter I will introduce for the first time the concept of an impulsive move and a corrective move, and since you already are familiar with the concept of different degrees for different waves, this will clearly help you going forward into this project.
Elliott Waves Theory was applied on the stock market at the beginning and now it is widely used on every tradable security. For the currency markets, I would say that it is more difficult to label waves because of the immense volatility we’re facing each and every day, markets being opened 24/7 and react to news/statements/speeches quite fast and furious. Because of that, complex forms of corrections are common for the currency market and the task of labelling the waves becomes quite a challenging one.
Starting with the next chapter I will go into details on the impulsive waves, showing you the rules, guidelines, and how to look for targets when waves are expanding.